Impact of Basel II Implementation on the Financial Performance of Private Commercial Banks of Bangladesh
Impact of Basel II Implementation on the Financial Performance of Private Commercial Banks of Bangladesh

Author: Sarwar Uddin Ahmed

Publisher:

Published: 2019

Total Pages: 12

ISBN-13:

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To ensure financial stability and development, capital adequacy framework of financial institutes is an integral part for global business. In recent times, BASEL-II has been implemented globally and its outcome has been constructive for financial institutions. Considering the current condition of financial institution of Bangladesh it has become important for Bangladesh to implement BASEL-II adequately to get sound financial performance. Accordingly, this study aimed to explore to what extent the capital control endeavor influences the financial performance of the banks in Bangladesh. To investigate, this article explores relevant secondary data of 25 listed private commercial banks (out of 30) in Bangladesh for the time horizon of 5 years (2008-2012). Particularly, the article used multivariate panel OLS regression model where financial performance or profitability of commercial banks was measured in terms of relevant influencing variables (e.g. asset turnover, size of the firm, capital adequacy ratios). The result shows that the capital adequacy requirement might have a positive impact on the profitability of the commercial banks in Bangladesh.

Implementation of Basel Accords in Bangladesh
Implementation of Basel Accords in Bangladesh

Author: A K M Kamrul Hasan

Publisher: Springer Nature

Published: 2021-07-29

Total Pages: 223

ISBN-13: 9811634726

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This book analyzes the impact of Basel Accord in Bangladesh. More specifically, it focuses on the credit risk homogenization under standardized approach of Basel Accord where External Credit Rating Agencies (ECAIs) are allowed to rate the exposures, the potential risk of allowing sub-ordinated debt (Sub-debt) as Tier 2 capital, and multiple bank distress cases as a real-world scenarios. In doing so, the book explores why the ECAIs rating fail to capture the real credit risk of exposure and to what extent sub-debt is reliable as regulatory capital. With that, the book's scope is categorized into three tracts (i) analyzes the ECAIs incentive and sanction issues from institutional economics perspective (ii) discusses the ill-impact of Naïve adoption of sub-ordinated debt as regulatory capital and its associated risk on financial system, and (iii) providing readers an empirical illustrations of bank distress when an economy tapped into institutional failures in the above-mentioned tracts (i) and (ii).

Basel II
Basel II

Author: United States. Congress. House. Committee on Financial Services. Subcommittee on Financial Institutions and Consumer Credit

Publisher:

Published: 2005

Total Pages: 240

ISBN-13:

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Bangladesh
Bangladesh

Author: International Monetary Fund

Publisher: International Monetary Fund

Published: 2010-02-12

Total Pages: 48

ISBN-13: 145199723X

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This paper reports on Bangladesh’s Financial System Stability Assessment. Considerable progress has been made in strengthening the resilience of the country's financial sector. Total assets of the banking sector have increased twofold since 2003, and credit to the private sector has risen threefold. Loan classification, provisioning, and even capital remain uneven in the banking sector, creating potential vulnerabilities. The rapid growth in nontraditional banking activities is generating new risks, underlining the importance of strengthening the regulatory framework.

Compliance of Minimum Capital Requirement (BASELII Pillar-1)
Compliance of Minimum Capital Requirement (BASELII Pillar-1)

Author: Kamrun Nahar

Publisher:

Published: 2016

Total Pages: 11

ISBN-13:

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The Basel Committee on Banking Regulation and Supervisory Practices devoted significant resources and considerable attention to the development of the capital adequacy framework for internationally active banks, known as the Basel Accord. The primary purpose of the Capital Accord was to make regulatory capital requirements more responsive to the credit risk associated with a bank's portfolio of assets and off-balance sheet activities. The study has made an attempt to find out whether banks in Bangladesh are maintaining the minimum capital requirements (MCR). A random sampling of some State owned bank, Private commercial Bank and Foreign bank has taken as testing model being employed to measure the impact of capital requirements. The result shows that the minimum capital requirement to comply with Basel II has been maintained.

Exploration of the Impact of Basel III on the Performance of Commercial Banks
Exploration of the Impact of Basel III on the Performance of Commercial Banks

Author: Professor Alain Ndedi

Publisher:

Published: 2015

Total Pages: 25

ISBN-13:

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Commercial banks are major actors in the financial industry and the economy as a whole. Due to financial globalization which is simple terms can be defined as the free movement of capital and money, and the advent of the financial crisis of 2008, the world economy suffered financial turmoil. Then there came a need to revise the existing regulation of the sector, in which certain accepted and others looked at it as a route to failure. It is in this light that experts in the field felt that it is important to look at the impact of Basel III at a performance of commercial banks. Simply put, the Basel III is a global, voluntary regulatory standard on bank capital adequacy, stress testing and market liquidity risk. The main objective of this paper is to examine the impact of the Basel III principles of (capital requirement, leverage ratio, and liquidity requirements) as indicators for commercial bank performance. This could also be looked through the preferred return rate and risk appetite of shareholders. Their research design used in this study is a mixed method approach by using both qualitative and quantitative method in gathering data. The main data came from secondary sources from the EU countries. Furthermore, data will be presented on tables and a descriptive analysis will be used to conduct their analysis. The results of this research using three scenarios and the findings were as follows: Increase in capital doesn't necessary result to increase in financing cost. A higher leverage will obtain a higher tax advantage and therefore a lower capital is preferred. The new Basel III capital ratios will prevent over-leveraging and such tax advantage would be reduced, and finally the new requirements do have a significant impact on the net income and credit portfolio allocation.

Corporate Sustainability and Financial Performance of Bangladeshi Banks
Corporate Sustainability and Financial Performance of Bangladeshi Banks

Author: Rezaul Karim Chowdhury

Publisher:

Published: 2018

Total Pages:

ISBN-13:

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Purpose- This study analyzes the connection between the sustainability performance and financial performance of Bangladeshi banks to ascertain whether the implementation of sustainability regulations has an impact on financial performance. Furthermore, if an impact is found, whether it increases or decreases the financial performance of these banks. Design/Methodology/Approach- This study evaluates financial and sustainability related performance indicators taken from published Central Bank reports as well as from respective banks' published annual reports and websites. The indicators have been analyzed using several statistical methods, such as Linear Regression, Panel Regression, and Granger causality tests. Practical Implications- Porter and Linde (1995) claimed that improving a firm's environmental performance can lead to better financial performance, without an increase to cost. By following this approach, Bangladeshi banks can make more profit on the one hand and save the environment on the other by investing more in green products and projects. Social Implications- Bangladeshi banks will be able to influence and motivate businesses to become greener, which will reflect on society and on the total economy. As a result, the country will be able to lower the pollution rate and better handle other natural calamities that hinder the everyday life of the people and of society overall. Research Limitations- Since this is a new concept for Bangladesh, with regulations having been introduced only six years ago, the field is currently going through the early development phase. Hence, very little research has been done on this topic. Moreover, the data related to green performance indicators are not consistent throughout the years of implementation due to limited reporting, which limits the set of available data on hand. More data is needed to analyze the long-term effects of the regulations. Originality/Value- To the best of the author's knowledge, this is the first study that explores the sustainability performance of Bangladeshi banks, including their product and services. Furthermore, the study adds to the knowledge regarding the impact of financial sector regulations and policies on the environmental and financial performance of banks. Keywords: Banks; Bangladesh; credit risk; green banking; Environmental & Social Risk Management (ESRM); corporate sustainability; guidelines. Paper Type- Research paper.

A Comparative Study of Financial Performance of Banking Sector in Bangladesh - An Application of CAMELS Rating System
A Comparative Study of Financial Performance of Banking Sector in Bangladesh - An Application of CAMELS Rating System

Author: Nimalathasan Balasundaram

Publisher:

Published: 2012

Total Pages: 0

ISBN-13:

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The Banking sector in Bangladesh is different from the banking as seen in other developed countries. This is one of the Major service sectors in Bangladesh economy, which divided into four categories of scheduled Banks. These are nationalized commercial Banks (NCBs), Government Owned Development Financial Institutions (DFIs), Private commercial Banks (PCBs), and Foreign Commercial Banks (FCBs). Performance of financial Institution is generally measured by applying quantitative techniques of financial measurement. It is a post - mortem examination techniques of achievement of a bank. Many Studies are conducted in different countries to judge the performance of their banking system using different statistical methods such as Data Envelopment Analysis (DEA) and the Stochastic Frontier Approach (SFA). The present Study is initiated a Comparative Study of Financial Performance of Banking Sector in Bangladesh using CAMELS rating system with 6562 Branches of 48 Banks in Bangladesh from Financial year 1999-2006. CAMELS rating system basically quantitative technique, is widely used for measuring performance of banks in Bangladesh. Accordingly CAMELS rating system shows that 03 banks was 01 or Strong, 31 banks were rated 02 or satisfactory, rating of 07 banks was 03 or Fair, 05 banks were rated 04 or Marginal and 02 banks got 05 or unsatisfactorily rating.01 NCB had unsatisfactorily rating and other 03 NCBs had marginal rating.

Predicting the Financial Distress in the Banking Industry of Bangladesh
Predicting the Financial Distress in the Banking Industry of Bangladesh

Author: Md Mostofa

Publisher:

Published: 2016

Total Pages: 14

ISBN-13:

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Financial distress is the technical term which is used to assess the insolvency as well as bankruptcy of the financial organizations. Banking sector of Bangladesh play a vital role in the economic development of the country. The main purpose of this study is to assess the financial performance of the banking sector using various ratios. This study also attempts to forecast the bankruptcy or possibility of bankruptcy using Altman (1968) Z-score model. From the various studies it has been found that this model reveals the Altman Z-Score was found to be 72% accurate in predicting bankruptcy two years before the event. The accuracy of this models varies depends on the types of the industry analysis. There are 25 conventional and non-conventional commercial banks which have been randomly selected out of 56 banks for this study over the period of 2010 to 2014. There are various financial ratios like activity, profitability, solvency, leverage & market value ratio that have been used to measure the financial performance of the banks. To measure the financial distress various ratios and descriptive statistics have been used. This study reveals that among the selected commercial banks 24% in the safe zone, 20% in the distress zone and 56% in the grey zone. The greater degree of fluctuation occurred in EBIT to total asset ratio. The findings of the study help the managers, depositors, regulatory body & the shareholders to look after their interest in the banking sector of the country.